Google to Build Server Farm in Lenoir, N.C.

After more than 13 months of secret negotiations with state and local governments, Google has agreed to build a $600 million computer center in Lenoir.

The decision, announced Friday, brought into full view the price of pushing a struggling community into the 21st century.

State, city and county governments slashed Google's tax bill -- potentially more than $100 million over 30 years -- to win the project and the 210 jobs it is expected to create within four years.

"The incentives are great, but we think the benefits are great, too," said Lenoir Mayor David Barlow.

Lenoir and Caldwell County leaders expect the company that provides the world's most popular Internet search engine to bring a new identity to the region. The area has been defined, and devastated, by furniture and textiles. Officials have fought to recover from declines that prompted factory closings and thousands of layoffs.

They're counting on Google to jump start the economy and pull in more development to the area about 200 miles west of Raleigh.

Google plans to build a server farm on 215 acres it bought from county economic developers for about $7 million. While the potential for the site is grand, the initial plans aren't.

For now, Google expects to construct one building that will house hundreds, perhaps thousands, of computers.

The company already has begun grading work and aims to complete the facility within 18 months. As many as 400 people could get construction jobs.

Once the first phase is complete, Google expects to employ 75 to 125 workers at the data center. Jobs will average $48,300 annually, almost twice the county average, according to the state.

The effects of Google's planned operation could eventually permeate North Carolina. By being closer to a hub on Google's network, residents could get search results, e-mail and certain computer files faster.

Jobs, but for whom?

The focus in Lenoir is on jobs. Just two-thirds of Caldwell County residents have high-school diplomas, according to census data, and many Google positions will require higher education.

Google executives sought to blunt fears that locals would be passed over, saying they have talked with education officials about training. In addition, jobs will be available in security, landscaping and janitorial services.

"My personal philosophy and the company's philosophy is to hire locally as much as possible," Lloyd Taylor, director of Google's global operations, said on Friday.

Google is scouring the world for new sites to build server farms as it races to keep up with demand and outmaneuver rivals. Even as it prepares to build in Lenoir, it is continuing to evaluate a site near near Charleston for another location, said company spokesman Barry Schnitt.

Server farms are becoming the backbone of the next evolution of the digital revolution. As more pictures, videos and other data move from the desktop to a network, companies such as Google need huge capacity to store them.

And they need to be as close to their customers as they can get. Just as a traffic jam on the highway can slow the morning drive, too much data zipping around can slow the Internet. The shorter the commute, the less risk.

"The reason that Food Lion, Wal-Mart, Federal Express, all those places, work is they have an incredible delivery system based on hubs delivering atoms," said Paul Jones, an associate professor at UNC-Chapel Hill and director of Ibiblio.org, a digital library. "This is the same kind of thing, just delivering electrons."

Power and water

Server farms need huge amounts of power, access to water needed for cooling and an on-ramp to the information highway.

Lenoir had all three. Even so, officials sweetened the appeal.

Lenoir and Caldwell County leaders agreed to waive 100 percent of Google's business property taxes and 80 percent of its real-estate taxes for three decades. The General Assembly last year approved a measure that eliminated sales taxes on electricity and certain other expenses.

Commerce Department officials approved a separate grant for the company, and Google can apply for more tax credits. State concessions could exceed $96 million over 30 years. County and city leaders had no estimate for their enticements. All depend on how much Google builds.

"The way we see incentives is really a way to level the playing field," Taylor said.

With the concessions provided by state and local governments, Taylor said, Lenoir made sense.

Some critics worry that leaders went too far. "I'm afraid we gave away the farm," said Timothy J. Rohr, a member of the Lenoir city council.

"I'm philosophically opposed to economic development incentive grants," he said. " ... Everyone else in the community is going to have to take up the slack."